CMF vs VTEB

CMFAiShares California Muni Bond ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

CMF The California-only corner of the muni market, indexed since 2007 and priced at 0.08%. CMF holds bonds issued by California and its municipalities, tracks an AMT-free index, and pays monthly.

VTEB Vanguard's national muni index fund, running since 2015 at three basis points, a tenth of what the typical muni ETF charges. Its benchmark screens for investment-grade bonds whose income is exempt from federal tax and the AMT.

Stated mandate

CMF The Fund seeks to track an index of California municipal bonds. It uses representative sampling and generally invests in municipal securities issued by California and its municipalities.

VTEB VTEB seeks to track an index measuring the investment-grade segment of the U.S. municipal bond market. It uses passive sampling to approximate the index and generally invests in federally tax-exempt municipal securities.

Why people hold it

• CMF 0.08% a year, a fraction of what the typical muni bond fund in its category charges. On a tax-exempt income stream, the fee is the part you actually control.
• The benchmark is the ICE AMT-Free California Municipal Index, so bonds whose interest counts toward the federal alternative minimum tax are screened out.ishares.com
• Follows that index tightly using representative sampling, and ranks among the strongest implementations in the muni ETF group.
• Running since 2007, with assets in the billions and cash paid out monthly.

• VTEB Three basis points a year against a 0.30% muni-ETF median. On tax-exempt bonds, where coupons are modest, that fee gap is a real slice of the payout.
• The index holds only investment-grade munis whose interest is exempt from federal income tax and the alternative minimum tax, so the income carries no AMT surprise.vanguard.com
• A multi-billion-dollar fund and one of the most heavily traded in the muni category, which tends to show up as tight bid-ask spreads. Income is paid monthly.
• It has tracked its benchmark closely and sits among the strongest implementations in a crowded muni bond peer group.

Worth knowing

• CMF One state's credit, one state's budget cycle. National muni funds (MUB, VTEB) spread tax-exempt exposure across the whole country instead.
• Moderately traded next to the national muni names, so limit orders earn their keep on bigger tickets.
• It is a bond portfolio, not a savings account: prices move as interest rates move, and longer maturities move most.

• VTEB Federal exemption, not blanket coverage. Income can still be taxable in your home state, which is why single-state funds like NYF exist alongside it.vanguard.com
• Credit quality is investment grade, so rates are the main swing factor: when muni yields rise, bond prices and the fund's share price fall.vanguard.com
• Sampling, not full replication. The fund owns a representative slice of a very large index rather than every bond in it.vanguard.com

Full CMF profile⁠

Full VTEB profile⁠